If a building is a house in multiple occupation (HMO) within the meaning of Section 254 of the Housing Act 2004, can dwellings within the building also be houses for the purposes of the selective licensing scheme in Part 3 of the Act? The Upper Tribunal (UT) has answered that question in the affirmative, finding that a local authority was entitled to impose financial penalties on a landlord in respect of each of the flats in a building he owned.
The building was a three-storey house that had been converted to comprise four flats. It was in an area that had been designated by the local authority as a selective licensing area under Part 3 since January 2020. However, the landlord had not applied for any licences until July 2024, after an inspection by the local authority. The local authority issued him with financial penalties of £2,125 in respect of each of the flats.
He appealed to the First-tier Tribunal (FTT), arguing that the building was an HMO within Section 254(4) of the Act and the flats were therefore not caught by the Part 3 selective licensing regime. Alternatively, he argued that any offence was one of failing to license the building as an HMO, so there should be one penalty rather than four.
Dismissing his appeal, the FTT found that the building was not an HMO under Part 2 of the Act, as the area in which it was situated was not subject to additional licensing under Section 56 of the Act. The specific exclusion in Part 3 in respect of HMOs falling under Part 2 therefore did not apply. Each of the four flats was subject to selective licensing and the penalties for failing to license them had been properly imposed.
Ruling on his further appeal against that decision, the UT observed that Parts 2 and 3 are different regimes with somewhat different objectives. The UT had previously decided in Northumberland Mews Ltd v Thanet District Council that each of the dwellings in a building can be a house for the purposes of Part 3 notwithstanding that the building is also a house for those purposes. Rejecting the landlord's argument that the appeal should be distinguished from Northumberland Mews as that case did not deal with an HMO, the UT could see no justification for a different conclusion where the wider house represented by the building is a particular sort of house, namely an HMO within the meaning of Section 254(4). Parliament had specifically addressed the exclusion of HMOs from Part 3, excluding HMOs to which Part 2 applies. It had chosen not to specify any change to the Part 3 regime on the basis that a property is an HMO to which Part 2 does not apply. The appeal was dismissed.
